UK Natural Gas Market Tightens on Supply Risks
UK natural gas prices rose to 187 pence a therm, more than 150% higher than at the start of the year, as supply concerns intensified around the Strait of Hormuz. Britain is particularly exposed because it has limited gas-storage capacity and relies heavily on seaborne LNG imports when demand rises or renewable generation weakens. Europe has greater storage capacity but is also facing unusually low inventories, with facilities around 71% full versus a five-year seasonal average of 87%. Deliveries to the EU and UK are about 4% below last year on a 30-day average, although imports have recovered from much sharper declines in August. Prolonged disruption through Hormuz is increasing competition between European and Asian buyers for LNG, around a fifth of which transited the waterway before the Iran war. QatarEnergy has extended its force majeure on supplies to Italy’s Edison until December, while Pakistan has received an extension into November.
UK natural gas prices rose to 187 pence a therm, more than 150% higher than at the start of the year, as supply concerns intensified around the Strait of Hormuz. Britain is particularly exposed because it has limited gas-storage capacity and relies heavily on seaborne LNG imports when demand rises or renewable generation weakens. Europe has greater storage capacity but is also facing unusually low inventories, with facilities around 71% full versus a five-year seasonal average of 87%. Deliveries to the EU and UK are about 4% below last year on a 30-day average, although imports have recovered from much sharper declines in August.
Prolonged disruption through Hormuz is increasing competition between European and Asian buyers for LNG, around a fifth of which transited the waterway before the Iran war. QatarEnergy has extended its force majeure on supplies to Italy’s Edison until December, while Pakistan has received an extension into November.